Latest official figure has revealed that the monthly cost of servicing the United Kingdom Government’s debt jumped to a record of £8.7bn in June.
Gatekeepers News reports that the record £8.7bn interest was due to the surge in inflation, which raised the value of index-linked government bonds.
The £8.7bn is more than three times (£6bn higher) as much as the £2.7bn in interest payments seen at the same time last year (June 2020).
The Office for National Statistics (ONS) noted that in the overall borrowing, the difference between spending and tax income was £22.8bn.
This, was £5.5bn lower than in the same month last year but still the second-highest level for June on record.
Gatekeepers News reports that borrowing has been hitting record levels as billions are being spent on measures such as furlough payments, the cost of servicing all that borrowing has been increasing as well.
The huge amount of borrowing over the past year has now jacked government debt to over £2.2 trillion, or about 99.7 percent of GDP – a rate not seen since the early 1960s.
ONS has estimated that the government borrowed a total of £297.7bn in the financial year to March. That was 14.2 percent of the UK’s GDP and the highest level since the end of World War Two.
The ONS said the cost of measures to support individuals and businesses during the COVID-19 pandemic meant that day-to-day spending by the government rose by £204.3bn to £942.7bn last year.
Chancellor Rishi Sunak, in response to the latest figure, said he was “proud of the unprecedented package of support we put in place to protect jobs and help thousands of businesses survive the pandemic”.
He added: “However, it’s also right that we ensure debt remains under control in the medium term, and that’s why I made some tough choices at the last Budget to put the public finances on a sustainable path.”
